Japan's Ministry of Economy, Trade and Industry (METI) has published feed-in tariffs (FITs) for solar installations with a capacity between 10 and 250 kilowatts and it wants to allocate to more than Feed-in tariff (FIP) for a 250 kW solar project.

METI sets a fixed FIT of 11 yen ($0.096)/kWh for PV systems with a power capacity of 10~50kW and a fixed FIT of 10 yen ($0.087)/kWh for installations with a capacity of 50~250kW . While projects belonging to Group 2 will have the opportunity to participate in auctions where feed-in tariffs are awarded and will be included in the 50-1000kW group in procurement activities, both project categories will receive fixed tariffs without having to select them in the procurement plan.

For the latter, METI set a maximum price of 10 yen ($0.087)/kWh and decided to exclude all grid-connected PV systems until January 17, 2022. Through the auction scheme, METI hopes to allocate 665MW of solar power generation across three different auctions.

Both FIT and Feed-in premiums are valid for 20 years and also apply to agricultural PV and floating PV installations. "These FITs are not expected to encourage Japan to expand solar power generation," said Takeshi Magami, a Japanese photovoltaic expert.

Magami said the new FIT level will not make the project profitable because the cost of building solar power facilities in Japan is rising. “Currently, a FIT of around 14 yen/kWh can ensure the necessary business profitability. METI does not seem to want to expand solar power generation through FIT, but only to keep FIT alive. This is because the Japanese government has not set the introduction under FITs. target for solar energy. Therefore, the current FIT is not consistent with the Japanese government’s 2030 renewable energy introduction target.”

According to his estimates, the cost of solar projects has increased by around 20% from last year, and tariffs are now 10% lower than 2021 levels. “By 2021, Japan should deploy 4~5GW of new PV capacity because there are still unutilized projects from past FITs,” Magami further explained, “By 2022, these unfinished projects will no longer be available, if Japan If the government does not expand support measures, it is expected that the new solar power generation will not exceed 3GW.”

METI has allocated 675MW of PV capacity across three different auctions in 2021. “Average bid prices ranged from JPY 10.31/kWh to JPY 10.82/kWh, with the lowest bid price being JPY 10.23/kWh,” Magami emphasized, noting that all these prices were significantly higher than those proposed for this year’s procurement campaign maximum price.